SECTION A: (20 marks)

1. Production for the international market is known as:

A) Direct production.

B) Indirect production.

C) Self-sufficiency.

D) Subsistence.

2. A tertiary produce refers to:

A) A producer of a service.

B) A produce of raw materials.

C) A producer of goods and service.

D) A producer of semi-finished goods.

3. Which of the following does not influence a consumer's decision to buy a commodity

A) Tastes and preference.

B) Income of buyer.

C) Price of the commodity.

D) Income of the seller.

4. When estimates for the cost of supplying a certain product are required, a buyer may invite suppliers to submit:

A) Contracts.

B) Invoices.

C) Tenders.

D) Proforma invoices.

5. Which of these is the most appropriate business undertaking for firms offering professional services?

A) Sole proprietorship.

B) A partnership.

C) A parastatal body.

D) A private limited company.

6. If a business had the following records:

Cash shs3, 000

Stock shs13, 500

Debtors' shs2, 200

Creditors' shs4, 300

Its working capital would be shs:

A) shs23, 000.

B) shs18, 600.

C) shs8, 400.

D) shs14, 400.

7. The introduction of containerization in transport means

A) No need for special handling equipment.

B) Easier loading and unloading.

C) Increased insurance costs.

D) Higher freight charges.

8. On receipt of goods returned by the buyer a seller issues

A) A debit note.

B) An invoice.

C) A credit note.

D) A receipt.

9. A drawer of a bill of exchange is:

A) A person who owes money on a bill of exchange.

B) A person demanding payment on a bill of exchange.

C) The place where the bill of exchange must be kept safely.

D) A drawing showing a person who draws a bill of exchange.

10. The significance of the doctrine of proximate cause to the insured is:

A) To compensate those with a financial involvement in the subject matter of insurance.

B) To compensate those persons who deals with them openly and honestly.

C) To compensate only those who are in legal relationship with the subject matter of insurance.

D) To honor claims where the insured risk was the cause of the loss or damage.

SECTION B: (80 marks)

11. a) i) Define the term" standard of living".

ii) Why is the "standard of living" important to the businessman?

b) Outline and explain five factors that affect the standard of living of a community.

12. i) Give the difference between a cash transaction and credit transaction.

ii) What document can be used to find out whether a trader is worth credit or not?

iii)Explain the sources available of obtaining a confidential report on a buyer credit worthiness in your country.

iv) How may a supplier reply a letter of inquiry?

13.a) What is the significance of a proforma invoice when sent to the following?

i) Headmaster of a school together with text books.

ii) An importer who buys goods from aboard.

iii) A wholesaler buying goods from a producer for the first time.

iv) A central bank by an importer.

b) Outline circumstances when trade is carried out without the services of a wholesaler.

14. a) Why are most business entrepreneurs in Uganda sole-proprietors?

b) What are the short -comings of this type of business organization?

15. a) Differentiate between

i) direct tax and indirect tax.

ii) a consumer association and consumer co-operative society.

b) Outline briefly the main source of revenue for a government.

c) Explain four reasons why a consumer should be protected.

16. a) Of what use is Uganda Commercial Bank to farmers in Uganda?

b) Describe the functions of the Bank of Uganda to commercial banks.

17. a) With the help of at least two examples, explain what is meant by branding.

b) How does branding help:

i) The manufacturer?

ii) The consumer?

c) i) How does branding differ from packaging?

ii) Mention two principal aims of packaging.

18. a) Define the term "mark-up".

b) The following record of 1991 was extracted from the books of Mr. Q.Wandwa, a small retailer in Kisenyi trading centre.

Turn over shs58, 400

Margin 25%

Expenses shs5, 840

Calculate his:

i) total cost sales,

ii) gross profit,

iii) net profit,

iv) net profit as a percent of the turnover.